Scottish Sheriff Court Decisions

 

SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT FORT WILLIAM

2015SCFORT13

SA55/14

 

JUDGMENT OF SHERIFF R DAVIDSON

in the cause

SAMS OMALE

Against

ARMANDO RODRIGUEZ BARCENAS

 

Act: Party

Alt:  Party

 

 

Fort William, 3rd. February, 2015.                                        The sheriff, having resumed consideration of the cause, finds the following facts admitted or proved:-

[1]        The pursuer is Sams Omale (44) who resides in Lochaber.  He is a married man with two young children and is in full time employment as a care worker.

[2]        The defender is Armando Rodriguez Barcenas (50) who resides in Lochaber.  He is a married man in employment as a graphic designer.

[3]        By missives of let, the tenant’s signature on which is dated 7 November, 2013 while the landlord’s agent’s is undated, the pursuer agreed to let the defender’s property at 24 Caledonian Road, Corpach, Fort William PH33 7LG from 8 November, 2013 until 8 May, 2014 “and for successive periods of two months until terminated in the manner hereinafter provided.”  At this date and the following day which was the date of entry, the defender was abroad and matters were dealt with by his agents, Messrs. MacArthur Stewart, Solicitors, Fort William.

[4]        The form of the tenancy was a short assured tenancy.

[5]        The rental payment agreed was £500 per month payable monthly in advance by standing order due to be paid on the 8^th of each month.

[6]        The tenant was also to be responsible for “the whole costs” of electricity, oil gas and telephone (if any.) The tenant was to “take over” the fuel at the commencement of the tenancy and leave at least as much in the tank at the end of the tenancy or make payment for any deficiency.

[7] Clause 7 of the tenancy agreement provided:-

“ At the start of the tenancy, the Tenant will pay to the Landlord a deposit of FIVE HUNDRED POUNDS(£500) Sterling. This deposit will be held under the Tenancy Deposit Scheme, details to be notified to the tenant by the landlord. At the termination of the tenancy or within a reasonable time thereafter, the Landlord will determine the amount (if any) which the Tenant remains liable to pay to the Landlord either due to damage to the property or arrears of money due to the Landlord under this agreement. The Landlord will thereafter notify the Landlord Deposit Scheme provider as required regarding the release of the deposit.”

 

[8]        This was an unfurnished let.

[9]        Clause 19, entitled “COMMON PARTS,” provided:-

“The Tenant agrees to keep the common parts of the building in which the house is located (if any) in a reasonable state of tidiness and cleanliness and to be jointly responsible with other occupiers of the common parts for so doing. In particular, the Tenant agrees;

(i) to ensure that any common stairs, passageways and paths are swept and cleaned once a week or at such times as is reasonable required by the landlord;

(ii) to ensure that any garden is maintained by mowing, weeding, hedge cutting or other work as the Landlord may reasonably require, and this at such frequency or on such

occasions as the Landlord may reasonably require;

iii) not to store any possessions (for example bicycles or prams) on the common parts without the prior written consent of the other occupiers and of the landlord.

In the event that the Tenant fails in any of the above responsibilities, the Landlord will be entitled to arrange for such works as it considers necessary to be carried out and to recover the reasonable cost in so doing from the Tenant.”

[10]      Clause 26, entitled “INSTALLATIONS” provided:-

“The Landlord will keep in repair and proper working order the installations in the House for the supply of water, gas, electricity, sanitation, space heating and water heating (with the exception of those installed by the Tenant or which the Tenant is entitled to remove) including the following:

i.      basins, sinks, baths, toilets and showers;

ii.     gas or electric fires and central heating systems;

iii.    electrical wiring;

iv.    door entry systems;

v.     cookers;

vi.    extractor fans.”

[11]      The tenancy was terminated by the defender serving a Notice to Quit on the pursuer and it is agreed that the tenancy was terminated on 16 June, 2014.

[12]      The defender did not lodge the deposit in any statutorily approved tenancy deposit scheme but lodged it in his own bank account.

[13]      At the conclusion of the tenancy there was more oil in the central heating tank than there had been at the beginning.

 

[14]      The pursuer removed what was described as a cabin bed and threw the wooden panels comprising same outside where they became saturated by rainfall and unusable.

[15]      At the conclusion of the tenancy, the pursuer asked the defender to return his deposit.

[16]      At the conclusion of the tenancy, £84 of rent was outstanding.

[17]      In the course of the tenancy, damage had been sustained to a door when a child closed the lock from inside the room making it necessary to break into the room to rescue the panicking child. The tenant had not been furnished with any keys for the locks on the internal doors.

[18]      In the course of the tenancy, the fixings for a shower screen became loose.

[19]      At the conclusion of the tenancy, the garden of the subjects of let was in an unkempt state.

[20]      The defender repaired the internal damage to the property and dealt himself with the condition of the garden.

[21]      The defender purchased replacement items in relation to the internal damage caused to the property at a price totalling £92.97. He spent ten hours carrying out repairs and putting the garden into a tidy condition.

 

Finds in fact and law:-

[1]        The action relates to the tenancy of heritable property at 24 Caledonian Road, Corpach which is within the territorial jurisdiction of this court. This court, together with the Court of Session, has exclusive jurisdiction in this cause.

 

[2]        Having regard to the terms of section 121 of the Housing (Scotland) Act, 2006 and the terms of Tenancy Deposit Schemes (Scotland) Regulations, 2011, especially regulation 3, the failure of the defender to lodge the deposit paid to him by the pursuer into an approved tenancy deposit scheme within 30 days of its receipt was an unlawful act, this being a tenancy to which the aforesaid Regulations apply.

[3]        A tenancy deposit scheme must, in terms of para 6(1)(d) of said Regulations, have a dispute resolution mechanism.

[4]        In terms of paras 9 and 10 of said Regulations, where a landlord fails to comply with any duty in respect of the tenancy deposit, the tenant may bring proceedings by summary application in the sheriff court which must be made no later than three months after the date of termination of the tenancy. No such summary application has been initiated nor had been by 17 September, 2014.

[5]        The defender further failed to comply with the requirements of para. 42 of the Regulations pertaining to information which he is obliged to give to the tenant about the placement of the deposit.

[6]        There is no contractual condition requiring the defender  to reimburse the pursuer for unused heating oil.

[7]        The garden was not common property.

[8]        Clause 7 of the lease is inept as any dispute pertaining to the deposit would require to be resolved by the dispute resolution procedure under the tenancy deposit scheme and it would be the adjudicator of the procedure who would determine what amount, if any, of the deposit could be returned to the tenant.

 

Finds in law:-

[1]        This court has jurisdiction in the cause.

[2]        Leaving aside the failure to comply with the Tenancy Deposit Schemes (Scotland) Regulations, 2011 in relation to the placement of the deposit into the hands of the operators of an approved tenancy deposit scheme, the contract of tenancy was otherwise lawful.

[3]        The landlord is entitled to payment from the deposit of outstanding rent of £84.

[4]        In the absence of compliance with the Tenancy Deposit Schemes (Scotland) Regulations, 2011, the retention by the defender of the pursuer’s deposit being unlawful, it is inappropriate and contrary to public policy for this court to make any order in favour of the defender to allow him to retain any part of the deposit not representing arrears of rent.

[5]        There is no contractual basis for the pursuer’s claim for the recovery of the value of unused heating oil.

 

Accordingly, grants decree in favour of the pursuer for payment to him by the defender of the sum of £416.00 with interest thereon at the rate of 8% per annum from 16 June 2014 until payment; authorises the defender to retain from the deposit paid by the pursuer the sum of £84;  In respect that there has been unreasonable conduct on the part of the defender in relation to the claim, Finds the defender liable to the pursuer in the expenses of the cause as assessed in terms of the Summary Cause scale of expenses and assigns                          as a diet of assessment.

 

 

                                                                        NOTE 

Statutes referred to:

[1]        The Housing (Scotland) Act, 2006 esp ss. 120 and 121.

“120. (1) A tenancy deposit is a sum of money held as security for

(a) the performance of any of the occupant’s obligations arising under or in connection   with a tenancy or an occupancy arrangement, or

(b) the discharge of any of the occupant’s liabilities which so arise.

 121.  (1) The Scottish Ministers may by regulations (“tenancy deposit regulations”) –

(a) set out conditions which a tenancy deposit scheme must meet before they can approve it under s. 122,

(b) make such further provision about tenancy deposit schemes as they think fit.

            (2)        Tenancy deposit regulations may, in particular –

(a) make provision about the manner and circumstances in which tenancy deposits must  be paid, held and repaid under an approved scheme,

 (b) impose sanctions for failing to participate in, or to comply with, an approved scheme,

 (c) set out a mechanism for resolving disputes relating to an approved scheme,

 (d) prescribe the type of person who may administer an approved scheme,

(e) authorise the Scottish Ministers to make payments or to give guarantees or other assistance, in connection with -

                          (i) the creation, administration or operation of an approved scheme,

                          (ii) the resolution of disputes relating to an approved scheme,

(f) set out the amount, or the maximum amount, of any fee which may be charged in connection with an approved scheme,

            (g) prescribing arrangements for publicising approved schemes

 

 (3) But tenancy deposit regulations may not –

(a) prescribe circumstances in which tenancy deposits must be paid under a tenancy or  an occupancy agreement,

(b) create offences.”

   

[2]        The Antisocial Behaviour etc. (Scotland) Act, esp s. 83 (6)

“(6) For the purposes of subsection (1)(b), the use of the house as a dwelling shall be disregarded if –

(a) the house is being used for the provision of –

(i) a care home service (as defined in subsection (3) of the Regulation of Care  (Scotland) Act 2001 (asp 8),

(ii) a school care accommodation service (as defined in subsection (4) of that section,

 (iii) an independent health care service (as defined in subsection (5) of that section;

or

 (iv) a secure accommodation service (as defined in subsection (9) of that section;

 (b) the house is being used by a religious order the principal occupation of which is prayer, contemplation, education or the relief of suffering;

(c) a control order under s. 178 of the Housing (Scotland) Act 1987 (c.26) is in force in respect of the house; or

             (d) the house is being used for holiday purposes.”

Statutory Instruments referred to:

[1]        The Tenancy Deposit Schemes (Scotland) Regulations, 2011.     

Esp. Regulations 1, 2, 3, 4, 9, 10, 20, 24, 25, 26, 27, 28, 29, 30,31, 32, 33, 34, 35, 36, 37, 38 and 42.

In this small claims action, neither party had the benefit of legal advice. Both of them got the law badly wrong and neither had made any effort to ascertain what the law might be.

[2]        The Housing (Scotland) Act 2006, section 121, authorised the Scottish Government to introduce regulations relating to a scheme for the secure holding of tenancy deposits, an issue which had given rise to a disproportionate number of disputes and small claims actions in courts over whether and, if so, how much of a deposit taken at the outset of a tenancy should be returned by a landlord to the former tenant.

[3]        Para. 3 of the Tenancy Deposit Schemes (Scotland) Regulations, (“the Regulations”) provides that a relevant tenancy for the purpose of the Regulations is one where the landlord is a relevant person and the tenant is an unconnected person as those two expressions are defined in s. 83 (8) of the Antisocial Behaviour etc. (Scotland) Act, 2004. In effect all tenancies and occupancy arrangements fall within the ambit of the Regulations other than tenancies of the types specified in s. 83(6) of the 2004 Act none of which are relevant to the instant case. In particular, the tenancy entered into in the instant case between the pursuer and the defender falls within the ambit of the Regulations so far as concerns any deposit required to be paid by the tenant.

 

[4]        In the present case the pursuer let the subjects at 24 Caledonian Road, Corpach, from the defender from 8 November, 2013 until 16 June, 2014 on a short assured tenancy the agreement relating to which was entered into on 7 November, 2013. Said agreement required the tenant to pay a deposit of £500, to be held under the Tenancy Deposit Scheme, which, subject to any lawful deductions, would be repayable at the conclusion of the tenancy

[5]        The defender did not place the £500 deposit into a Tenancy Deposit Scheme but retained it.  In terms of para 3 of the Regulations, that failure breached the Regulations and was, accordingly, an unlawful act.

[6]        At the conclusion of the tenancy, the pursuer sought the return of the deposit, under deduction of £84 for rent which he admitted was due, together with a sum to compensate him for unused heating oil left in the oil tank. The defender refused to return the deposit citing certain damage to the property which had occurred in the course of the tenancy and in particular that the garden had been left in an unkempt condition..

[7]        Clause 6 of the tenancy agreement provided, amongst other things, that “At entry you will take over the whole stocks of fuel on the subjects (if any) and at the termination date will leave at least the same quantity of fuel and will make good the cost of any deficiency.” There was no contractual mechanism for a refund of the cost of oil in excess of the starting volume and, in any event, no evidence of the extent to which the final volume exceeded the starting volume. I have, accordingly, made no order relating to a refund for the residual heating oil.

 

[8]        Clause 19 of the lease had the heading, “Common Parts.” Sub-clause (ii) provided that the tenant agreed “to ensure that any garden is maintained by mowing, weeding, hedge cutting or other work as the Landlord may reasonably require, and this at such frequency or on such occasions as the Landlord may reasonably require.” There was no evidence in the present case from which I could conclude that the garden, which appeared to be unkempt, was a “common part of the building in which the house was located,” nor was there any evidence of the defender having “required” the pursuer to carry out any work to the garden or having specified when or how often any such work should be carried out. I am accordingly unable to make any finding about the cost of rectifying the garden, there being no contractual obligation upon the tenant to maintain the garden which was part of the subjects of let but not common property.

[9]        Clause 29 of the lease provided that the tenant would be liable for the cost of repairs where the need for them was attributable to his fault or negligence. There was an assertion that wooden parts of a cabin bed had been placed outside the house by the pursuer and had become rotten and unusable. There was, however, no evidence of the cost of replacement. It was conceded that an interior door had been damaged but the pursuer maintained that he had no choice when one of his children pulled down the snib on the locking mechanism of this internal door for which he had not been given keys by the defender. Since the situation arose as a result of the failure on the part of the defender to provide keys for the door locks, I cannot see how this “need for repairs” is attributable to the pursuer.

[10]      In any event, the failure by the defender to place the deposit in the hands of the scheme administrator of an approved Tenancy Deposit Scheme was an illegal act, having regard to the provisions of Regulation 3 of the Tenancy Deposit Scheme (Scotland) Regulations 2011. Where the operation of a contract is affected or tainted by an illegal act, it is the duty of the court to take notice of the illegality even if it is not raised by either party – Hamilton v McLauchlan (1908) S.L.T. 341; Gloag and Henderson, “The Law of Scotland” 12^th. edition para.9.02. In my opinion, while the contract of let is perfectly legitimate, the failure to lodge the deposit in a Tenancy Deposit Scheme is not and the effect of that is that it is not for the court to resolve any issue arising out of the right to retain any sum from the deposit at the conclusion of the tenancy. This is particularly so when it becomes clear, on a consideration of the 2011 Regulations, that it was the intention of the Scottish Ministers  and of the Scottish Parliament by virtue of the powers delegated to the Scottish Ministers in the Housing (Scotland) Act 2006, ss. 120 and 121, to create as part of an approved Tenancy Deposit Scheme a dispute resolution mechanism. Broadly, the Regulations require all deposits to be lodged with an approved scheme and, on the conclusion of the tenancy, require the landlord to apply to the administrator of the scheme for the repayment of the deposit or alternately for power to retain it. In that application, the landlord should specify how much he seeks to retain and how much should be repaid to the tenant. The scheme administrator is then to contact the tenant to see whether the tenant agrees with the terms of the landlord’s application. Where there is a dispute, the sum subject to dispute must be held in a designated account by the scheme administrator pending the resolution of the dispute or the tenant’s failure to invoke the dispute resolution mechanism. In the event of the mechanism being invoked, the appointed adjudicator determines how much of the deposit is to be repaid. In the event of the mechanism not being invoked, the deposit is to be retained, after due notice, by the landlord. There is a process by which the adjudicator’s decision may be reviewed. Such a process negates any need for either a landlord or a tenant to involve a court or to incur the expense of litigation.

 

[11]      While the regulations do not expressly provide that the jurisdiction of the court is excluded in matters relating to the return of a tenancy deposit, the scheme, by implication, suggests that this is the intention by making it mandatory that all deposits must be deposited with an approved scheme. That has influenced my decision to decline to deal with the issues pertaining to the deposit in the present case but the reason in law for my decision is that it would be contrary to public policy to entertain the defender’s assertions of the pursuer’s breach of the tenancy agreement when he has unlawfully failed to place the deposit into the hands of the Tenancy Deposit Scheme administrator. In any event, I was not persuaded that the landlord’s claims were justified having regard to the terms of the tenancy agreement.

[12]      The tenant did however properly concede that £84 of rent was due and could be deducted from the deposit and I have given effect to that concession.

[13]      Rule 21.6 of the Act of Sederunt (Small Claim Rules) 2002 applies, subject to s. 36B of the Sheriff Courts (Scotland) Act, 1971, to the determination of expenses in a claim, amongst others, “where there has been unreasonable conduct on the part of a party to that claim in relation to the proceedings or the claim.” The present claim should not be in court. It should have been adjudicated upon,  free of charge and any award of expenses, by an adjudicator appointed in relation to an approved Tenancy Deposit Scheme. That would have happened but for the defender’s unlawful action in retaining the deposit which he knew or ought to have known should have been deposited with the administrator of such a scheme. In these circumstances, I find the defender liable to the pursuer in the expenses of the claim as assessed in accordance with the applicable statutory table of fees. A diet for that assessment shall be assigned.